New Yorker by birth & attitude, I live in Europe, where I am a Professor at IMD, in Lausanne, Switzerland, and where I co-direct the IMD/MIT-Sloan "Driving Strategic Innovation" program; and have had a long-time love affair with China, where we first moved our family to China in 1980, and where later I was the Executive President & Dean of CEIBS (the China-European International Business School) in Shanghai (1997-1999). I've recently co-authored (with Umberto Lago & Fang Liu) "Reinventing Giants" (2013) and (with Andy Boynton): "The Idea Hunter" (2011) and "Virtuoso Teams" (2005).

Sloooowprise! RIM Slips into the Abyss

At long last, there is good news for Blackberry fans! After quite a few anxious months, when the very fate of the organization appeared to be in question, RIM CEO Thorsten Heins, announced last week that “there’s nothing wrong with the company as it exists right now.” What a relief! After all, when you are down 95% in market valuation, you can sort of sense that at some point, if things get worse, questions regarding leadership’s prowess will eventually be raised. Fortunately, that won’t be necessary, as Mr. Heins also reassured us that “This company is really in the middle of a transition. We know what we’re doing; we’re executing on our programs.” Whew! It could have been really close had management not responded in time with this announcement. Now we know that there’s no “death spiral” in RIM’s future, although the notion of “free fall” does come to mind. How did this happen? How could a great company, with a great brand, and a great product, be victimized so quickly? Were they ambushed? Did they never see it coming?

The answer, my friends, is that this was not sudden at all. In fact, RIM’s slow slide into ignominy has been going on for a rather long-time, as did Kodak’s and Nokia‘s, and the railroads, and fax machines, and the decline of physical mail, as well. The one thing that that all these now “disrupted” organizations had in common was the sloooooowness of how their declines played-out. All too often, disruption is not so much about surprise, as it is about slowprise!

What accounts for slowprise? To a very large extent, the chief culprit is success. Our past success, and a desire to enjoy the associated rewards to the full, lead many firms into denial and sluggishness in the face of needing to adjust to a potential disruptive offering from somewhere else; particularly if we don’t take that “somewhere else” very seriously. SONY’s reluctance to move away from its once-great Trinitron technology, at a time when everybody else saw that the future was flat-panel TVs, is a case in point. Imagine how difficult it was for RIM to confront the reality of the smart phone challenge in the face of rising revenues and profits, which had been the case over the past several years – with revenues and profits actually peaking in 2011 — until, suddenly it seems too late! But, the point is that RIM’s demise was anything but “sudden.” And, management missed it. As did, Kodak’s, and Nokia’s, and so many others.

Another culprit that makes slooowprise so deadly is leadership overconfidence, or hubris; the belief that we know what we’re doing, despite everyone else starting to do something different, can be a killer. Isn’t that what RIM’s Mr. Heins said: “We know what we’re doing”? After all, we’re “leaders,” we must be good! We made it to the top, so we must know what we’re doing to get to such positions! Yet, Disney’s inability to take computer-animation seriously, at a time when Pixar was experimenting with what would become the industry’s next big breakthrough, was likely the result of leadership overconfidence — in a set of technologies that were fast fading from the scene. Similarly, RIM’s inability to appreciate what was going on around it as smartphones emerged, is also an example of what has been referred to as “blinding confidence” in the company’s C-suite. The “imperial” assumption by many Western entrants into the Chinese market that “only an experienced Western manager was suitable to run a Chinese operation” provides yet another aspect of how “managerial overconfidence” can derail even the best planned strategic alternatives.

The role of leadership confidence turns out to be a complex phenomena. My good friend and IMD colleague Phil Rosenzweig tells me that there is a very strong stream of thought in contemporary management literature revealing overconfidence as a pernicious threat to sound managerial strategic choice, despite its desirability in those instances where we need to inspire employees to take an organization beyond what even they think is possible in the pursuit of a new advantage. And, even in those situations where managerial confidence is a necessary prerequisite for big change initiatives, you need to ensure is that such confidence does not distort the ability of leadership to accurately read the strategic battlefield that the firm is competing on. RIM certainly needs confident leaders at this point in time, but do I really believe that they are looking soberly at the situation at present? Not from Mr. Heins’s recent comments! In fact, it appears to me that his view of the future is pocked-marked with “blindspots.”

The bottom line of all of this, of course, is that disruption is a failure of leadership more than innovation. It is all-too-often neither rapid, nor unexpected, but slow and tortuous. We all watched in horror as Kodak died a death of thousand tiny cuts, and we all watched in mystification and could not imagine what was taking RIM, or Nokia, so long to wake-up? In every case, well-intentioned, experienced and well-meaning leaders let their organizations down. Perhaps, disruption is less about urgency and more about awareness — the need to watch different communities and to try to look further-out into the future; less about responsiveness and more about pro-sponsiveness– trying more to be the disrupter, or to try to imagine what a disrupter might be thinking, rather than being able to respond quickly, but after the event? If strategy is all about choice, then the way that the C-suite regards the future, and the transitory nature of any competitive advantage, may be one of the biggest choices of all.

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i have to strongly disagree with your comparison to old technology. First of all, the name of the company is Research In Motion. Not ‘RIM’ which is a slanderous term. The whole idea is to lead other technology companies into the future. Obviously we got way too popular and the wrong people took charge. BlackBerry products are designed exclusively for researchers who have time to program and design as we go. Until now, no one has taken the time to write a manual for the PlayBook and consumers are returning them because they dont take the time to fix the errors. if im the last one on earth to run this company, it wont bother me one bit. btw your auto type sucks on forbes.com thanks jtm

i have to strongly disagree with your comparison to old technology. First of all, the name of the company is Research In Motion. Not ‘RIM’ which is a slanderous term. The whole idea is to lead other technology companies into the future. Obviously we got way too popular and the wrong people took charge. BlackBerry products are designed exclusively for researchers who have time to program and design as we go. Until now, no one has taken the time to write a manual for the PlayBook and consumers are returning them because they dont take the time to fix the errors. if im the last one on earth to run this company, it wont bother me one bit. btw your auto type sucks on forbes.com thanks

An excellent summary of How the Mighty Fall, by Jim Collins. I really hope he reads this and feels a small sense of pride in his work. It seems everyone and his wife who are interested in business and leadership are familiar with his 2nd major piece (Good to Great), but far too few acknowledge the later works (comparatively speaking). Your hubris comments seem to point the other way though. Good for you, no really.

This is a fantastically similar story to that of Motorola in the late 90′s, which is covered in Jim’s book. When will CEOs learn to learn from others?

I have personally been involved with once great comapnies whose management knew more about the market place than their customers, sales force, or service department.

I’m happy to report most are now selling residential real estate or selling used cars on a corner lot. In either case they have minimal impact on the lives of those who supplied their paychecks for WAY too long.

As Bill Fischer wrote, RIM basically did this to themselves. My company spent many hours, resources and $$ developing our apps for the Blackberry, in cooperation with RIM, only to have it be DENIED approval for the Blackberry App Store.

Reason: RIM felt it would compete against their own BBM service.

I know many other App companies who experienced same. Spent time, money, resources developing for the Blackberry platform WITH RIM’s full knowledge and cooperation, only to be denied at the end.

IMO, this is worse than blocking, but highly unethical (knowingly cooperating during development, taking time and $$$ with no intention of approving entrance to the Blackberry App Store).

My company and many other mobile app developers, moved onto what was then “new” platforms called Apple iOS and Google’s Android. No choice as the star of the party, led us on and told us at the end of the evening, “we don’t like you and don’t want you.”.

So, as the saying goes, “you reap what you sow”.

The day RIM goes under will be the day I and many thousands of others who they screwed will be toasting their final demise.

In all of these cases of failed leadership, many employees lost their jobs and it would be instructive to know how well-compensated these failed leaders while their company crumbled around them. I’m guessing very well.